There’s no shortage of drama in the state of Michigan over the fate of municipal authority in several distressed cities, with Detroit featuring most prominently in the latest headlines. Critics contend the issues posed by a controversial emergency-manager law speak to not only the rights of local governments but democracy itself. We’ve relayed previously that around a year ago the state of Michigan approved a new law that gave Emergency Financial Managers (EFM) greater power over the decisions of local officials. Known as a “financial martial law,” state auditors are able to void municipalities' union contracts and even dissolve local jurisdictions. Detroit is currently mired in intense financial scrutiny that could lead to the appointment of an EFM.
Essentially, emergency managers have increased authority when it comes to overseeing cities that are struggling financially, and the ability to remove elected officials and void contracts has been a troubling development for local governments. While the legislation’s effects on collective bargaining rights have already gained plenty of attention, the attack on local control is especially noteworthy for municipal officials around the country, as Michigan has proven to be a high-profile testing ground of sorts in light of its severe economic woes.
A recent and preliminary review of Detroit’s books led the Treasury to conclude the city is facing “probable financial stress.” A 10-member financial review team has now been compiled to take a closer look at the city’s finances. The financial review team is the next step in the process of possibly appointing an Emergency Manager to run Detroit. It is believed that the city’s budgetary shortfalls could lead to a negative cash balance as early as April.
Detroit Mayor Dave Bing and the City Council are attempting to negotiate with labor unions in order to secure major concessions so that the city can save more than $100 million a year. In the meantime, Rev. Jesse Jackson and a collation of pastors, civil-rights leaders and elected officials have joined together to fight the possibility of an EFM appointment and they have even compared the state-appointed officials to “dictators.”
Michigan Governor Rick Snyder has defended the law and posited that its intent is not to see cities end up in financial receivership; rather, Snyder says the law creates an early warning system complete with extensive reviews so that financial receivership can be avoided. Snyder and state officials are pointing to the fact that one of the five local governments under emergency managers will emerge from receivership in 2012.
The law is facing a court challenge and a referendum petition drive. Among the concerns driving the backlash are questions about whether a financial martial law violates the will of voters by giving one person from outside the community control over its fate. Michigan is a state to keep an eye on as the battle over local control in distressing economic times takes shape.